These are the closing costs for which all Arizona buyers should prepare.
Which closing costs are you responsible for when purchasing property in Arizona? There are a lot of misconceptions about this topic, so today I’ll list the four costs you should prepare for and explain how each varies depending on your situation.
Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch it in its entirety, or use these timestamps to browse specific points at your leisure:
5:03—How your down payment differs from the closing costs
5:41—How closing costs can be negotiated
6:24—Wrapping things up
As always, if you have questions about this or any real estate topic or are thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’m happy to help.
Here’s an update on the economy from the federal level down to the state level.
Most of the benefits of the $2.2 trillion stimulus package that Congress passed earlier this year in response to COVID have now expired. Congress is now adjourned and they’re potentially going to negotiate a new package, but in the meantime, four executive orders were recently signed that you should be aware of. Here is what they entail and how they’ll affect you:
1. Unemployment benefits. Unemployment benefits went from $600 a week down to zero as the funds expired. Now they may go back up to $400 a week based on what state you live in until something more concrete is passed by Congress.
2. Evictions. There is a moratorium on evictions in some states based on certain metrics that you would have to check with the HHS Department and the CDC to learn more about.
3. Postponed student loans. The delay in payments was set to go through September 30, but a three-month extension has been authorized. So if you have student loan debt, your first payment won’t be due until January 2021.
4. Payroll taxes. If you make less than $104,000 per year, you’re eligible to suspend or defer payroll tax on your paycheck through sometime next year.
According to the Mortgage Bankers Association, 3.8 million homeowners in America are currently in mortgage forbearance. The numbers here in Arizona have begun to plateau, but on a national level, that is a huge number. If you know of anyone who has been furloughed or is otherwise experiencing financial difficulties and would like to know what their options are, we’d be happy to help.
“The Arizona market will likely continue to be one of the strongest housing markets in the country.”
There is some good news on the state level, however. The market is on fire right now; supply is very low and demand is sky-high thanks to people moving here from states like California. Here are some of the stats from our Arizona market:
1. Appreciation. The annual appreciation for 2020 is 12.8%, which is huge when you compare it to 2005, when the market went up extremely fast—the annual appreciation then was 26% (before the market came crashing down).
2. Affordability. If you’re a family making the median income in Arizona ($72,300), you should be able to afford about 60% to 75% of what is still selling in our market today.
3. ,Monthly payments. For the average homeowner in 2020, the average monthly payment is 30% lower than it was in July of 2006.
All in all, affordability is very good right now. We don’t currently have much of a bubble, but we’re not sure how long these trends can continue. At any rate, the Arizona market is very strong at the moment. I would argue that because of our increase in demand from the population influx and job growth, we’ll likely continue to be one of the strongest housing markets in the country.
If you have any questions about the market or need assistance with buying or selling a home, don’t hesitate to reach out to us. We’re here to help you.
If you want to successfully navigate the 2020 Phoenix real estate market, there are three key points to remember:
1. July and August, traditionally the two slowest months of the year, are anything but.
In the wake of the COVID-19 pandemic, 2020 has been anything but a normal market. The pent-up demand from March, April, and some of May has come to roost in June and July. Right now, we’re seeing multiple-offer situations for homes across all price segments. If you’re a buyer, hire an agent who knows how to win out in multiple-offer situations, is familiar with different segments of the market, and has good relationships with other agents in the area.
2. As the old saying goes: Don’t wait to buy real estate—buy real estate and wait.
The average price point in Maricopa County is up to an astonishing $350,000, a significant increase over the past several years. This means if you were to purchase a house now for $300,000 at an interest rate of 4%, you’d build up about $32,000 worth of equity by 2025 (and have a loan balance of around $268,000).
At the end of the day, the affordability index is quite low in the Phoenix area.
Conversely, if you were to rent a house at that same price point, you’d pay roughly $2,000 per month. In that scenario, assuming you’d be living the same lifestyle, you’d end up paying $120,000 in rent after five years. In the first instance, you’d be putting $32,000 toward your net worth. In the second, you’d be squandering $120,000. In short, homeownership is a huge advantage.
3. Interest rates are very low.
In July of 2019, the average interest rate for a 30-year mortgage hovered around 3.8%. Right now, it’s down to 3.2%. Although rates will probably creep back up eventually, they’re low now and even more advantageous than last year, and last year was a very good market for both buying and selling.
At the end of the day, the affordability index is quite low in the Phoenix area. We have great job sector growth, low property taxes, and our price points are relatively low given all of the amenities Phoenix offers.
If you have more questions about our Phoenix area market or are thinking of buying or selling soon, feel free to call or email me anytime. I’d love to speak with you.